How do you determine a “target” savings number?

When you first start planning your around the world adventure this is the main focus, just about every question you have will be about money?

How much do I need to save?

How much will renting a house in Switzerland cost?

Do I want to go on tours, how much will that cost?

How much do I need to save for re-entry?

How much do I need in Southeast Asia?

Do I buy a RTW airline ticket or pay as I go?

Pretty much every single question you will ask yourself, (and everyone else for that matter) will ask is money related. If you look at my google search history it is all RTW money related.

I am quickly learning that when you are in the preparation stage it is all about planning & saving. While planning and researching destinations is easy…the saving part (especially if you are a spender like me) is hard. Trying to determine what I want to do, for how long & at what level of comfort is difficult.

I have come up with a number just as a target, but I am still trying to determine how much I really want to save.

Right now, I have set an initial budget of 25k, do I think this is going to be enough? NO but it is something for me to work towards while I work on planning especially when it comes to determining how long I want to be away. I am still trying to learn and determine my goals & am doing this by reading anything and everything I can when it comes to RTW budgets. Thankfully 1000s have already done this and have put their knowledge for those like me.

So here is what I have learned about budgeting so far.

Having a loose itinerary is important to get an idea of how much you need to live in that country. Do you want to travel through more expensive countries? Or is Southeast Asia more your speed? Maybe you want to do both. European budgets are vastly more expensive than cheaper South East Asia countries so determining where you want to go and for how long is important. As I am planning on spending a large part of my time in Europe, I know I need a larger budget.

You will need to determine if you want to have a flexible schedule, or are you willing to have a schedule for flights. I already know that I do not want to be hammered down to one destination, so I know the pay as I go flight option is the right choice for me. If I come across a cheap flight to the Maldives I want to be able to feel like I can go.

Next, you need to be honest with yourself. Do you want to stay in dorms or hotels and guesthouses? As I am someone that has trouble sleeping with noise I know that I will prefer guesthouses, private rooms & houses. Therefore this is going to be more expensive for me. I wish I could do the dorm thing, but I know I can’t. Which is why it is important to be honest with what level of travel you want, if you save for budget dorms but deep down you are a private room person, that will be a real bummer when you blow through your budget faster than anticipated.

You need to determine your must dos. Boy, this is where I am really struggling, as a person that is constantly adding to her bucket list, I am struggling with what I must do. Thankfully I have time, but I can tell you that when it comes time to narrow it down, I am going to struggle. A lot.

How much do you need for re-entry? Well this was easy. I took all my expenses and multiplied that by 3. As I anticipate needing three months to get back into the groove of things, I know I need to save 3-6 months of expenses that are just for re-entry. Is this high? Probably, but at the same time I rather be safe than sorry. Maybe it is my over cautious 32 year old self kicking in, but as I know the job market is constantly changing and I rather just have the safety net, even if it means I have to spend an extra 6 months saving. I am currently saving money for re-entry in a separate account. I am estimating about $9500 will be needed for re-entry.

As I am really more focused on paying down debt I have not been able to save like I really want, that being said I am currently posting my savings posts every three months to show how much I am saving & how I am getting there. I know I wish I would find more posts about how they saved and how much they saved at a time. So I am doing that with the hopes I help one person.

Please help me with budgeting! How did you plan an initial budget? Did you save for re-entry, what should I consider in my budget? Thanks!